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Planting seeds with Hometree

A boiler installation company might not sound like an obvious target for venture capital investment. But we believe Hometree is well-positioned to exploit the way the energy market is changing.

There are big changes ahead for the UK energy markets
With utilities increasingly heading towards a close to zero margin business we have to ask ourselves where the profit pools will be in the future. Our view is that there will be new profitable revenue models relating to decentralised but coordinated solutions. We also see new customer first models with an ongoing relationship to provide a full customer solution and not just energy or equipment. There will be a need to install and finance electric vehicle charging stations, decentralised power solutions such as solar, batteries, heat-pumps, smart home systems and combined heat and power systems (micro-CHP), and there will be a whole range of services that can be added once this equipment is in place. These business models will be “sticky” with customers committing to longer term agreements to include the financing of such options.

Where will consumers turn for these services?
In a similar way to the disruption seen in the estate agent and mattress retail segments over the last number of years, we believe that with a digital proposition there is a great opportunity to help homeowners in what is typically a very unsexy space where conventional service providers don’t put consumers first. In the heating market consumers typically want hot water and a warm home, but they don’t necessarily want to spend a lot of time thinking through what they need to achieve this. The big energy players have low levels of trust with consumers and a recent survey suggested they were less popular than the banks. Our view is that a company that can clearly communicate the benefits of such solutions and has the trust of the consumer to cleanly and efficiently install and maintain these solutions can become the trusted partner who consumers will turn to for all their energy needs.

We believe that a large percentage of consumers will be interested in these simple and transparent financing and installation options over the next few years.

Hometree
Hometree is focusing on consumer needs. For example: there’s no need to wait around at home all day for a boiler engineer to quote for a job. The quote can be provided via video consultation.

The company’s aim is to manage the whole replacement process through an intuitive online system, making things as pain-free as possible for the customer. Over time, Hometree will also offer simple, transparent financing options, to help customers manage the costs of installing and maintaining new equipment.

As consumers start utilising solar, batteries, heat pumps and electric vehicles there is also a great opportunity to coordinate these assets to help shift peak power demand. These solutions can then provide energy back to the grid at times it needs it most. Hometree’s aim is to take advantage of this potential opportunity over time.

By creating a business model that truly puts customers first, Hometree is building a base of loyal, happy customers who will trust Hometree to deliver other energy products and services in the future. Over time, Hometree could become a one-stop shop for all home energy needs. We think this is an exciting prospect. We are looking forward to working with Simon, Andreu and the whole Hometree team, as well as our fellow investors Local Globe and DN Capital, as Hometree works to fulfil its vision.

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